Time Warner's Bewkes Still Bullish on Cable

At CTAM: Embracing VOD and DVR Platforms

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WASHINGTON (AdAge.com) -- If one thing is clear from the opening panels of the Cable & Telecommunications Association for Marketing (CTAM) Summit here, it's this: You may never have to worry about missing a single episode of your favorite TV shows ever again.
Jeff Bewkes
Jeff Bewkes Credit: AP

Last year, viewing patterns began to shift as more consumers began to use digital-video recorders (DVRs) and more broadband video was streamed on both TV networks' home pages and third-party user-generated websites. And Nielsen's switch from average program ratings to commercial ratings in May forever changed the way viewing ads are measured to more accurately track commercial tune-out throughout a show's airing.

The video-on-demand model
Now it's time for the cable operators to get a bigger piece of the pie, said Jeff Bewkes, Time Warner chief operating officer. The video-on-demand model has proved to be a sufficient complement to consumers' media consumption, he told CNN reporter Soledad O'Brien in the opening keynote, and by the end of the year virtually all cable operators should be able to offer VOD content for free. He pointed to a network in the Time Warner suite of companies as proof of how effective the free viewing model can be.

"HBO is that now. If you have HBO on Demand, you're used to it. You don't have to DVR HBO, so we should take the whole industry and put it on that basis."

And the cable operators' multiple ways to view a show are proving to be effective without cannibalizing the live ratings that are still crucial to achieving mass reach for advertisers.

"If the best way to get an audience for a hit show is to put it on [a specific] night for free, why wouldn't you fulfill that brand agreement with the customer?" Mr. Bewkes said.

Sharing demographic data
Mr. Bewkes said the next step for cable operators is to share the demographic data they've compiled from their audiences and share it with advertisers, in a way similar to the big web portals. "Google has done a brilliant thing [in helping consumers search for] all this information [and placing] an ad next to it," he said.

"Cable systems not only have that data, they have what you're watching on TV and on-demand. [T]hat's a huge future for the cable industry and the only thing it needs is essentially common sharing of the data on an apples to apples structure."

In a later panel, NBC's chief research officer, Alan Wurtzel, said viewing patterns are evolving as early adopters lead the shift in media consumption. A study he presented on consumer habits showed the average American spends about four hours a day watching TV and about 2 hours on the internet. Of those two hours, 80% of men aged 18 to 24 said they watch broadband video on a weekly basis, while 53% of women in the same age range reported the same thing.

Not a passing trend
And Mr. Wurtzel expects streaming of TV shows to increase incrementally in the next year despite the medium being barely a year old. About 4% of viewers were watching streamed shows in March 2006, a number that increased to 12% in October and to 19% by May at the end of the season. Yet, that younger demographic has become more willing -– and even expects -– to pay for some of their media.

Just don't ask too much of them, he said. "The consumer's ability to pay has its limits -- the median income is about $46,000 a year, and about 5% of that is spent on entertainment."
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